Efficient cash management

[aliged]

I've heard that one is able to invest spare cash on an overnight( or other short-term basis) account in order to reap relatively healty interest/profits. Let's say I have £50K+ in the Company account earning next to nothing from my thieving Bank ......any suggestions as to get this working better for me?


Ta!

Ali

[2 sMoKiN bArReLs]

Most banks have their own deposit systems, will electronic facilities to move cash back & forth from current. These accounts typically have very low interest, but even £1 is better than naff all. If there is a "hard core" of deposit, the banks usually offer a higher rate, but with maybe a limited number of withdrawals.

.....you could always stick it on a horse of course...

[UpTheIron]

What do you call relatively healthy?

[2 sMoKiN bArReLs]

UpTheIron said:

What do you call relatively healthy?

Let's say he has £50k+

[billsnemesis]

When we have money on client account we can put it on overnight deposit on the money markets. The best amount to have and the rate of interest is highly variable but generally we would be getting 3.x% at the moment, generally between 3.3 and 3.7%

This is gross so net effect depends on the profit level for the company.

Banks have similar arrangements but you might need more than £50k to make it worth while or to get the bank to play ball.

There are variable periods you can use; overnight, seven day, month etc. For some time the longer periods have got the best rates but that changes from time to time.

Wish I had £50k in the bank

[groomi]

Directors Loan - Offset Mortgage.

[aliged]

billsnemesis said:

Wish I had £50k in the bank

A mere smidge compared to some on PH I'm sure.


Thanks for all the advice lads

[leftie]

We keep a 4 month term deposit account for our corporation tax waiting to be paid and any money that isn't active in the business (e.g. share dividends waiting for the end of the tax year). We have even put the VAT money in there at times. It is paid at the rate of 3.6% net.

The best rates are daily ones you have to ring them and ask about, and the best rate may come with a longer or shorter term, depends which side of the bed their main guy got out of.

Works for us and stops us splashing out on mad ideas as have a few months to wait to get at it! If the opportunity was that good we would borrow from the bank against the deposit. Alternatively open 2 term desposits which overalp so you are never more than 2 months from getting at it.

[chilli]

For a business account, you can agree for the clearer to withdraw any excess funda and place them on deposit O/N.